In times of crisis, optimism can seem naive. Christian Teichmann explains why a clear vision and a strong belief in progress are essential right now – and how this mindset is part of the strategy at BPI.
It is 2008 and Milda Mitkute's wardrobe is full. Too full: there are more than a hundred unworn pieces in it. When the 22-year-old wants to move to the Lithuanian capital, Vilnius, her huge amount of clothes becomes problematic. By chance, Milda meets programmer Justas Janauskas at a party and tells him about her overflowing wardrobe. Together they decide to create a website that allows people like Milda to sell their surplus clothes. Vinted was born, back then under the name 'Manu Drabuziai', which means 'my clothes'.
In 2015, Burda invests in the young company for the first time through its growth capital arm Burda Principal Investments (BPI). Second-hand was a fringe phenomenon at the time. The 'Circular Economy', an economic system that thinks in cycles and uses raw materials responsibly, was still in its infancy. “Nevertheless, we were convinced that sustainable consumption would continue to grow in popularity and that Vinted, with its specialised marketplace for used clothing, had a great chance of success," says Christian Teichmann, CEO of BPI.
At first, however, there are few signs of success. After a strong start in its home country of Lithuania and a rapidly growing number of users, Vinted expands to Germany under the name 'Kleiderkreisel'. The idea for the expansion is once again a coincidence – just as it was at the party: Justas, the programmer, meets two women from Munich who are couch-surfing in his apartment. They tell him that Germany also needed such a platform.
The problem at the time: there is hardly any income and the platform’s costs are exploding. As a result, the company introduces a fee in Germany for selling clothes via the platform. What was meant to save the start-up, ended in disaster. Users turn away from the platform and its popularity plummets.
“I remember an investor calling me and telling me he wouldn't invest another cent in the company,” says Teichmann. “Vinted was in crisis and urgently needed a new direction.” At the same time, the platform had already proven that the sale of second-hand fashion struck a chord, with buyers and sellers not only using Vinted once but coming back again and again. “It was therefore out of the question for us to sell our shares. Instead, we helped the founders find a new, experienced CEO who could take the start-up forward.”
The choice falls on Thomas Platenga from the Netherlands, who is Vinted's CEO until this day. He implements radical changes: Half the staff has to leave, the service fee is abolished, and a much lower fee is introduced for buyers. “The most important change Thomas Platenga made was to shift the focus from buyers to sellers. That was the decisive turning point for Vinted,” explains Teichmann.
In the years that follow, users return to Vinted, and the platform grows and expands to other countries. Second-hand transforms from being a fringe phenomenon to a trend, and Vinted is one of the pioneers. In 2019, Vinted becomes the first Lithuanian unicorn – a startup valued at more than one billion euros – in a new round of funding, again with the participation of Burda. The ‘party idea’ Vinted has since become the largest online platform for second-hand fashion in Europe, with users in 20 countries.
A few days ago, another milestone is reached: Vinted reports its first annual net profit for 2023. Following the merger with Rebelle, the platform is now increasingly offering second-hand luxury fashion and has expanded its range to include corporate customers. The company's success story, once on the brink of failure, is far from over.
At the same time, Vinted shows how fragile and unpredictable the success of young companies can be: would the sale of second-hand items on Vinted have become such a trend without the coronavirus pandemic? And where would the platform be today if the debate on the carbon footprint of clothing had not gained significant momentum?
One thing is certain: without investors who stand by young companies even in bad times, even the best idea can fail. “Thanks to Burda, we were able to keep going even in difficult times, which saved our company," says Vinted CEO Thomas Platenga, who is still grateful today.
Christian Teichmann is convinced that looking into the abyss has made Vinted so successful. “The founders were forced to make room for a new, experienced CEO and agree to serious changes. This paved the way for Vinted's current success.”
